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Nevada’s On-Again, Off-Again Cannabis Sales Back On, Set to Begin July 1

Fireworks and fountains show on Independence Day on July 4, 2016 in Las Vegas. (lucky-photographer/iStock)

This story was updated 6/23/2017 at 1:33 p.m.

RENO, Nev. (AP) — Nevada regulators reaffirmed Friday that they intend to issue licenses necessary for retailers to begin selling cannabis for recreational use on July 1, despite a court order that threatens to scuttle the plan.

The licensees could include as many as 25 medical dispensaries in the Las Vegas area and four others in Reno that already have medical retail licenses and local business licenses, “as long as the inventory they sell as retail meets the packaging and labeling requirements in the emergency regulation we will have adopted Monday,” state Department of Taxation spokeswoman Stephanie Klapstein said.

The fate of the recreational program has been in limbo since a Carson City judge ruled Tuesday that the ballot measure approved by voters requires that alcohol wholesalers have exclusive rights to cannabis distribution licenses for 18 months.

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District Judge James Wilson issued a temporary injunction barring the state from issuing cannabis distribution licenses to anyone else, including existing medical marijuana dispensaries.

However, Klapstein said Friday the “distributor issue will not hold up licensing of other marijuana establishments.”

Retail sales could be short-lived unless the state issues distribution licenses in the weeks ahead.

“The injunction has no effect on the other license types,” she said. Distributor licenses allow cannabis to be moved between locations and are different than retail licenses.

“Because the application review process isn’t complete, we can’t say with certainty which businesses will be licensed,” Klapstein said. “That said, those that applied, meet the qualifications and whose applications we get processed before July 1, will be licensed by July 1.”

Klapstein acknowledged those retail sales could be short-lived unless the state issues distribution licenses in the weeks ahead necessary to move additional products not already on-site from growers to retailers.

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“Once that inventory runs out, without distributors, they are not going to be able to restock,” she said.

Kevin Benson, a lawyer for the Independent Alcohol Distributors of Nevada, did not immediately respond to a request for comment.

The group filed the lawsuit considered by Wilson aimed at blocking any cannabis distribution licenses outside the liquor industry.

Department of Taxation Director Deonne Contine issued an emergency statement Thursday with the endorsement of Gov. Brian Sandoval explaining the need to implement a number of marijuana-related measures the Legislature adopted and that the governor has signed into law over the past month.

They include provisions that will tax recreational sales at a higher rate than medical marijuana and implement strict rules that mandate child-proof packaging and prohibit use of products found appealing to kids, such as lollipops and gummy bears.

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While the new regulations don’t directly impact the startup date for recreational sales, Contine’s emergency statement makes clear the state remains determined to launch the sales as early as next weekend.

“These emergency regulations are necessary to protect the public health and safety of our residents, children and visitors as we transition into an adult-use marijuana market,” Contine wrote in the order.

She said the measures had to be adopted on an emergency basis because the department will issue licenses to begin retail cannabis sales to adults as of July 1.